QUESTION ONE

Within a financial management context, discuss the problems that might exist in the relationships (Sometimes referred to as agency relationships) between

 (a) Shareholders and managers, and

(b) Shareholders and creditors

 How might a company attempt to minimise such problems?

QUESTION TWO

Two neighbouring countries have chosen to organize their electricity supply industries in different ways. In country A, electricity supplies are provided by a nationalised industry. On the other hand in country B electricity supplies are provided by a number of private sector companies.

 Required:

 (a) Explain how the objectives of the nationalised industry in country A might differ from those of the private sector companies in country B.

  (b) Briefly discuss whether investment planning and appraisal techniques are likely to differ in the nationalised industry and private sector companies.

 QUESTION THREE

"The finance manager spends most of his time making managerial finance decisions as opposed to routine functions". Discuss.